Timothy Barnes v. Chase Home Finance, LLC, 934 F.3d 901

Timothy Barnes obtained a $378,250 mortgage (Nov. 15, 2007) and a deed of trust on property formerly owned with his then-wife; loan funds paid off the ex-wife’s mortgage and a $100,000 divorce judgment, and title was conveyed to Barnes Nov. 16, 2007.
Barnes sued under the Truth in Lending Act (TILA) seeking rescission and damages; the district court originally dismissed rescission as time-barred.
On prior appeal this Court held Barnes gave timely notice of rescission and vacated the judgment, remanding for further proceedings.
On remand defendants raised a new argument: the loan was a “residential mortgage transaction” under 15 U.S.C. § 1602(x)/§ 1635(e)(1), to which TILA’s rescission right does not apply; the district court granted summary judgment for defendants on that ground.
The district court found Barnes’s prior ownership interest had been extinguished in 2003 and that the 2007 loan financed his reacquisition of the dwelling to obtain title per the divorce decree.
The Ninth Circuit affirmed: defendants could raise the argument on remand, and the loan was a residential mortgage transaction excluding TILA rescission.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether defendants waived the residential-mortgage argument on remand	Barnes: defendants waived by not raising it earlier	Defendants: permitted to advance new grounds on remand after reversal	Defendants did not waive; new argument allowed on remand
Whether law-of-the-case/mandate bars district court from deciding the issue	Barnes: prior mandate precludes relitigation	Defendants: prior decision addressed notice only, not existence of rescission right	Law-of-the-case/mandate did not bar the district court from deciding the issue
Whether the 2007 loan was a “residential mortgage transaction” under §1602(x)	Barnes: he had an existing interest (via divorce proceedings) or the loan documents called it a refinance, so rescission applies	Defendants: loan financed acquisition/reacquisition of dwelling, so §1602(x) excludes rescission	Court: loan financed reacquisition; §1602(x) covers reacquisition, so no TILA rescission
Whether a prior marital/co-ownership interest converted the transaction into a refinance	Barnes: Oregon dissolution law created a co-ownership interest before the loan	Defendants: any marital interest was not a prior purchased interest; Barnes did not "purchase" the interest	Court: even assuming a marital interest arose, it was not a "previously purchased and acquired" interest that converts the loan into a refinance

Edwards v. Wells Fargo & Co., 606 F.3d 555 (9th Cir. 2010) (summary judgment standard and review)
Merritt v. Countrywide Fin. Corp., 759 F.3d 1023 (9th Cir. 2014) (TILA rescission exclusions discussed)
Dunn v. Bank of Am., N.A., 844 F.3d 1002 (8th Cir. 2017) (applying §1635(e)(1) exclusion)
In re Bestrom, 114 F.3d 741 (8th Cir. 1997) (TILA rescission in reacquisition context)
Slenk v. Transworld Sys., Inc., 236 F.3d 1072 (9th Cir. 2001) (substance over form in classifying transactions)
Rocky Mountain Farmers Union v. Corey, 913 F.3d 940 (9th Cir. 2019) (law-of-the-case doctrine)
Edgerly v. City & County of San Francisco, 713 F.3d 976 (9th Cir. 2013) (mandate rule)
Comcast of Sacramento I, LLC v. Sacramento Metro. Cable Television Comm’n, 923 F.3d 1163 (9th Cir. 2019) (textualist approach to unambiguous statutory language)